Month: August 2013

Last week President Obama discussed his proposals for reforming higher education in an effort to control costs, debt and increase graduation rates. Over the next week knowyourcollegecosts.org will blog a variety of viewpoints concerning the president’s proposed reforms.

in reacting to Obama’s higher education policy speech at the State University of New York at Buffalo Thursday, in which the president proposed a ratings system for institutions to be tied to federal aid, faculty members expressed disappointment. While emphasizing that access to college is a good thing, they said, the speech failed to address deeper problems facing higher education — such as lack of funding, skyrocketing tuition and the increasing employment of adjunct faculty — and was too enthusiastic about massive open online courses (MOOCs), whose pedagogical effectiveness remains largely untested.

Faculty noted a number of perceived flaws in the plan. First, they argued that the outcomes-based assessment (graduation rates) was just an extension of K-12 federal No Child Left Behind Act. Rudy Fichtenbaum, president of the American Association of University Professors stated that non-elite Universities would become obsessed with ratings and move toward a more standardized curriculum that produced graduates in able to get more funding. Other professors also voiced displeasure with the idea of focusing on outcomes rather than learning. The idea of providing “value” in higher ed was viewed as problematic because as one professor mentioned:

I’m not seeing the value of a college education in terms of participation in public culture, or a graduate’s acquisition of the skills and curiosity essential to ‘learning how to learn.’ … Do we really want to say that an elementary school teacher has had a less successful college education than a hedge fund manager? I hope not.

President Obama is scheduled to give speeches today outlining his vision for changes to higher education in the United States. Here is a preview from the New York Times. We’ll be back with commentary after the speeches.

Student debt levels have been rising and have recently reached $1.2 trillion in outstanding loans. One solution to helping students reduce their debt is to have them graduate in four years or even a semester early since student loans tend to really add up beginning in the fifth year of college. Passing Advanced Placement (AP) courses in high school allows students to get college credit before they arrive on campus, giving them a leg up on graduating on time. AP courses have also been touted as an opportunity for students to experience the rigors of university courses – thus preparing them for better success in their freshman year.

An analysis by Politico shows that AP courses haven’t been making the grade. They state that

Enrollment in AP classes has soared. But data analyzed by POLITICO shows that the number of kids who bomb the AP exams is growing even more rapidly. The class of 2012, for instance, failed nearly 1.3 million AP exams during their high school careers. That’s a lot of time and money down the drain; research shows that students don’t reap any measurable benefit from AP classes unless they do well enough to pass the $89 end-of-course exam.

In its annual reports, the nonprofit College Board, which runs the Advanced Placement program, emphasizes the positive: The percentage of students who pass at least one AP exam during high school has been rising steadily. Because so many students now take more than one AP class, however, the overall pass rate dropped from 61 percent for the class of 2002 to 57 percent for the class of 2012.

Even more striking: The share of exams that earned the lowest possible score jumped from 14 percent to 22 percent, according to College Board data.

Further,

Advanced Placement classes, available in 34 subjects from art history to calculus, are supposed to be taught at a college level. The exams are graded on a scale of 1 to 5. The College Board considers 3 a passing grade, though fully a third of the universities that grant college credit for AP require a score of 4 or 5. Dartmouth College, questioning the program’s rigor, has announced it will soon stop accepting any AP scores for credit.

Advocates often argue that students benefit from being exposed to the high expectations of an AP class, even if they don’t pass the test. Yet there’s no proof that’s true.

In fact, taking an AP class does not lead to better grades in college, higher college graduation rates, or any other tangible benefit — unless the student does well enough to pass the AP test, said Trevor Packer, a senior vice president at the College Board.

The U.S. Department of Education released statistics today showing the number of college students receiving financial aid is at an all time high. Data from the 2011-12 academic year show that 57% of students receive some type of aid from the federal government. This is the first time that a majority of college students are receiving federal aid. According to an article in Politico

About 41 percent of all undergraduates took out loans, up from 35 percent four years ago. Borrowing is on the rise even in top income brackets. About 46 percent of students with families making more than $100,000 per year took out student loans, and a majority of students from families making $80,000 or less borrowed to pay for college.

The numbers also show the effect of skyrocketing spending on the Pell Grant. About 41 percent of all students received the grant in 2011-12, a 14 percent increase. Congress expanded the grant program several times between 2007 and 2009. As the economy faltered and incomes fell, spending on Pell grew from $12.8 billion in 2007 to $35.6 billion in 2011 before falling slightly last year.

A competitive financial aid market is causing colleges to offer more money to attract students on the basis of their accomplishments rather than need.

About 39 percent of students from families making less than $20,000 per year received grants from colleges’ own funds. But so did 38 percent of students from families with incomes of more than $100,000, up from 33 percent four years ago. The average grants were higher for the wealthiest students, who averaged $10,200 in college aid, than for the poorest, who got about $8,000.

Temple University graduate Jason Kasher has an innovative way to pay off the remaining $30,000 worth of his student loans. He’s starting a business called Paid to Run that seeks revenue through sponsorship of one mile increments of a planned 1000 mile trip. Check out the story here.

New York City mayoral candidate Christine Quinn has created a new program to help the middle class pay for expensive day care by offering student loans. In a column titled “Owe, Baby, NYC”, The New York Post describes this “first of its kind” pilot project:

The program…allows Neighborhood Trust Financial Partners, a local credit union, to offer 6-percent-interest loans through a $300,000 city subsidy. Families with children between the ages of 2 and 4 can get loans up to $11,000. In the first year, they’ll be available to 40 eligible families….New York City has some of the highest child-care costs in the country, averaging $13,000 per year, according to the Center for Children’s Initiatives. Applicants must have an annual income of $80,000 to $200,000, a credit score of at least 620 and agree to attend a free financial counseling session with a Neighborhood Trust counselor. Once parents are approved, the payments will be disbursed directly to the day-care providers. The program also allows parents to make interest-only payments until their children reach kindergarten-eligible age.

This is a surprising development given the current national discussion about college student loans. According to a study by the federal government’s Consumer Financial Protection Bureau there is $1.2 trillion in outstanding student loans ($1 trillion through the federal government). Currently 1 out of 8 student loan borrowers is in default.

Given these statistics is it wise to extend student loans to the parents of toddlers? Matthew Yglesias of Slate says no. He differentiates college and preschool loans in the following way:

Perhaps the best way to understand the problems here is to start with the deep logic behind student loans for college. College is expensive, and difficulty paying the tuition bill can be a major barrier to attending or completing college. Yet completing college appears to be quite financially rewarding, with degree-holders earning a lot more money over the course of their lives than those who don’t have a college degree. So it’s a very natural situation for a credit market to arise. Having the money to cover your college tuition makes you much more likely to be able to repay the loan in the future….

Day care lending, meanwhile, has basically none of the features that make college tuition loans seem attractive. Being able to get a loan for your 3-year-old to get some child care doesn’t in any clear way increase your income three, five, or 10 years down the road. For lots of hard-pressed New York families, a loan like this is going to be a great lifeline out of a difficult situation. But down the road, you’re going to end up with a new set of difficult situations as people struggle to repay the loans.

Ultimately the voters of New York City will decide on the wisdom of City Council Speaker Quinn’s plan when they vote for mayor.

Yesterday’s Sunday New York Times included a special section on Education Life. One of the articles helps potential students evaluate the “return on investment” from various colleges and universities. The ROI is defined as “the cost of attending set against future earnings”. While there are many reasons why students choose to attend a specific university,

middle- and low-income students who can’t afford to make mistakes, and students considering low-paying professions like social work or art, may want to figure in R.O.I. “The qualitative benefits of college, such as how fun the dorm life is, are temporary,” said Katie Bardaro, lead economist for PayScale, a Web site that reports compensation. “Your after-graduation earnings are permanent.”